While the New Orleans Saints have been focused on their historic Super Bowl season, state officials have been busy activating the many moving parts of an unusual new financial deal tying the club to the Superdome until at least 2025.

Team owner Tom Benson's new agreements with the state have cleared the lingering clouds of uncertainty about whether the team will remain a New Orleans franchise, a subject of grave concern after Hurricane Katrina.

Now comes the task of making the various new contracts work. A combination of a Dome upgrade, a state subsidy and a major downtown development project, the package soon will reshape the upper Poydras Street district that is still struggling to recover from Katrina. The multifaceted project is on schedule but must meet several challenges, and the long-term plan that is central to the vision of a revived sports and retail complex remains a concept only on paper until financing can be found.

"The big picture was to build a major sports center, to take those boarded-up properties and put them back to use again," said Ron Forman, chairman of the Superdome Commission. "It's a vision of the city going forward that's led by the Saints, Hornets and a sports district, and speaks to the future of our city."

In a few weeks, the huge, empty mall structure formerly known as New Orleans Centre will be demolished and converted into a large plaza, which state officials hope will be ripe for further development as an entertainment district. The interior of the state-owned Dome will undergo the first phase of a significant renovation.

The interior of the 26-story Benson Tower office building, previously known as Dominion Tower, is being refinished in preparation for more than 30 state agencies to move in.

Meanwhile, construction crews are refinishing the interior of the 26-story Benson Tower office building, previously known as Dominion Tower, in preparation for more than 30 state agencies expected to move their New Orleans operations there this year and begin paying rent to Benson.

The agreements replace a deal begun by Gov. Mike Foster that has been giving the Saints an escalating annual state subsidy recently reaching about $23.5 million, a widely criticized taxpayer gift that will continue for the next two years with some amendments under the new deal.

The subsidy was covered easily for years by a dedicated occupancy tax on New Orleans hotels. But Katrina reversed the fortunes of the city's tourist and convention business, causing the state to dip into its general coffers to pay the bill. As a result, the subsidy suffered a worsening reputation, and even former NFL Commissioner Paul Tagliabue frowned upon Louisiana's public-sector largesse.

So when the team began negotiations with state officials in 2008, Gov. Bobby Jindal opposed the idea of another long-term direct cash subsidy.

"What we were doing in the past was not going to work in the future," Forman said. "There was lot of innovation, a lot of give and take, and a lot of screaming and yelling. ... But at the end of the day we were excited about what we came out with."

The new arrangement poses fresh risks for Benson and the state but offers potential for greater rewards. It also introduces a third major party to the agreements: a new private firm called Zelia LLC, owned by the Benson family separate from the team.

Counting all the impacts of Superdome enhancements, new and remaining state subsidies, property leases and other sources of income, the deal for the Benson family and the Saints adds up to more than $400 million in guaranteed revenue over the next 15 years. Additional financial benefits could flow from co-investors using tax credits and from non-guaranteed office, plaza and parking revenue.

Benson is taking the risk of owning a major property downtown and will be responsible for real estate debt, tower renovations and maintenance, but overall the new business model provides him the opportunity to tap more financial resources.

The deal represents a big change for the Benson family compared to the previous state contract, said Paul Cordes, the family's attorney.

"Their component goes from a risk-free environment for the Saints and Bensons to a scenario where the Bensons have committed to a tremendous amount of investment in these facilities in the hope and expectation -- but there's certainly no guarantee to anybody -- that this will be financially successful," Cordes said.

Although the state will be paying more than $400 million in various costs to support the deal over the next 15 years, the actual new costs to the state will be far less. Not counting the final payments to the team under the old contract, the office rent that state agencies would have been paying anyway and the cost of the Dome renovation, the state money for Benson and the team likely will amount to about $150 million in that period, and the state might realize some profit from the sports district.

Here is how the interlocking pieces of the deal are taking shape.

Superdome and subsidy

Between now and the start of next football season, contractors will begin the job of adding 3,100 plaza level seats, 16 new luxury boxes, premium club lounges and 43 additional food and drink stands accommodated by larger concourses in the Superdome. After a pause for the fall games, the work will be completed in 2011.

The state will pay $85 million for the enhancements, which come on top of the $185 million in repairs and improvements made since Katrina. The strategy is to give the team more ways of making money from ticket sales and from concessions and merchandise revenue on game days.

If the Saints fall short of a targeted level of stadium revenue, the state will make up the difference with a payment up to $6 million, starting with the fiscal year that includes the 2011 football season. That revenue target and the limit on the subsidy will rise a fraction each year. For example, the state subsidy obligation will be about $7 million by the eighth year.

Although these so-called "inducement" payments reward poor business performance, Forman said they serve the purpose of guaranteeing the Saints' revenue expectations while offering a chance to reduce the state's annual obligation.

The Benson Tower
Katrina brought financial ruin to the Dominion Tower, a Poydras Street building once considered among the city's best office locations.

With minor damage and lost tenants, it has stood empty except for the adjacent space formerly occupied by the Lord & Taylor department store, which is being leased by a state health clinic.

Meanwhile, a number of state agencies with New Orleans offices were scattered from their pre-Katrina homes, and the state was considering construction of a new office building downtown to centralize its regional operations. Tighter budgets, the state's debt limit and escalating construction costs led to a growing argument against a new building.

During the Saints talks it was agreed that Benson would buy Dominion Tower from its California owner and perform a $12.5 million renovation if the state would guarantee enough agency tenants to fill about two-thirds of the vacant space for at least 15 years. He would find tenants for the remainder. His Zelia firm would own the tower and collect rent.

To fill its obligation, the state is trying to find enough tenants to fill 320,000 square feet of the Benson Tower at a starting rate of $24 per square foot, adding up to $7.68 million the first year and rising with the inflation rate each year thereafter. The price includes 900 parking spaces in the Superdome garage, which will be available to state employees at no charge.

While typical base rents for downtown office space run about $16.50 to $20 per square foot, newly renovated space including large common areas and parking would run considerably higher, meaning the state's lease rate in the Benson Tower would be about on par with the local market. However, in this case the tenant, which is the state, is providing its own parking.

The state division of administration has called upon numerous agencies operating in various locations in Orleans and Jefferson parishes to drop their current leases and move into the Benson Tower in July. Their current leases allow them to leave without penalty.

In nearly every case the move will cost the agencies higher rent. For example, the attorney general is being asked to take on an additional $237,717 in annual rent by moving its risk litigation and investigation offices into the Benson Tower. A tabulation based on recent data showed at least $1.2 million in extra annual rent for the state agencies, and that number is likely to grow as more offices join the move. Moving expenses will add to the tab.

But that comparison of rents is not as simple as it might seem. Some of the agencies after Katrina found temporary locations or have been accommodated by other government agencies, and those offices eventually would expect to move somewhere and potentially pay a higher rent anyway.

The state so far has identified enough tenants to fill about 90 percent of its space obligation in the tower, based on division documents. Most of the space will be occupied by divisions within the state health and social services departments that are committed to the move, but some agencies have gotten an exemption or are resisting the plan.At least seven agencies have convinced the division that they should not move because of logistical or expense problems. Those include the state boards of dentistry, certified public accountants and radiologic technologists, which would have had to raise professional fees to match their proposed 50 percent to 100 percent increases in rent.

The attorney general's office has expressed reservations about the move and a final decision has not been made.

The Louisiana State Board of Practical Nurse Examiners, on North Causeway in Metairie, has written letters to the division saying it does not want the extra expenses of the Benson Tower move, but perhaps a graver concern is city crime.

"The safety of the staff will probably be in greater jeopardy if we are forced to move into the Dominion Tower in New Orleans," board executive director Claire Doody Glaviano said in a letter to the division.

The board several years ago moved to Metairie from a New Orleans office, where in the 1990s a female staff member was "robbed at gunpoint, pistol whipped, had her head smashed several times into the asphalt of the parking lot," Glaviano wrote.

Short of its occupancy goal, the division of administration in late December cast its net wider to capture more state tenants. Unless it succeeds, the state could face a real struggle fully filling its floors of the tower.

The sports entertainment district

A dramatic change to the Dome area will commence when the once-bustling New Orleans Centre mall is leveled and converted into a plaza. This first phase in creating a major sports-entertainment venue is already financed, but there is no money yet to fulfill the next two phases of the ultimate plan.

The former Lord & Taylor space and the former Macy's department store building will remain, as will the former food court area on the ground level. The bridge connecting the Dome patio to the mall will be converted to step down into the plaza ground level. The 2,000-space parking garage next to Macy's will remain also.

All of these properties including the tower were bought by Zelia in September for $42.1 million. The $10.5 million demolition and renovation expense for the plaza is being appropriated by the state, which is getting compensation by subtracting that amount from the Saints' remaining subsidy payments.

The state, through the Superdome Commission, has taken on the role of real estate developer and agreed to pay a $2.3 million annual lease to Zelia to promote and manage the plaza, garage and remaining mall structures. Any earnings from those properties up to $2.3 million will go to the state. Earnings above that amount will be split evenly between the state and Zelia.

The new plaza with a built-in performance stage should be ready for the fall football season, when the area will be promoted as a game-day party zone with music and vendor stands. A major factor will be the parking garage, which could pick up business from Dome and Arena events but ultimately could thrive if the surrounding commercial corridor and visitors to the state offices can provide daily traffic.

The second phase, which could cost up to $15 million, would remove the existing bridge and provide a new segue and entrances between the plaza and the Dome, among other enhancements. No public or private money is designated for this phase.

The proposed third phase envisions restaurants, night clubs and entertainment venues centered by a grand plaza with collonades. The goal is to create a hot attraction on event days at the Superdome and Arena, but to work financially it would have to evolve into a new retail and entertainment destination for the city.

This type of district has been created in Los Angeles and near the New England Patriots stadium, with the help of billions of dollars of private investment.

The overall prospect of the development would get a boost if separate developers eventually succeed in revitalizing the neighboring Hyatt Regency Hotel, which has been closed since Katrina. The hotel project is not related to the Benson deal but could have a strong positive impact on the Benson properties if it were to reopen.

Forman said the new deal with Benson provides the first step toward establishing the coveted entertainment district, a type of destination that eventually will be seen as a signature venue for the nation's top entertainment cities.

"It's similar to another French Quarter or another riverfront," Forman said. "We can have a sports center that is built and modeled after the best sports centers in the country, that creates a lot of jobs, economic development, generates a lot of taxes for the city and state."